Standardizing exchange plan benefits could help consumers
For 2017, the federal government wants to encourage more standardized health plan designs on the Affordable Care Act exchanges, which could reduce out-of-pocket costs for consumers and increase coverage of certain services and drugs, according to a new analysis by Avalere.
This could include a standardized benefit in which all cost-sharing features are the same for each metal level. While these benefit designs would be optional for plans, the government is strongly encouraging plans to sell at least one standard silver plan. In theory, the new plans would provide first-dollar coverage for physician visits, and all tiers of prescription drugs in silver and gold plans, the analysis says.
With this approach, health plans might become more appealing to the healthier population because first-dollar coverage adds value to insurance plans, which is not something that exists for those paying a monthly premium while never meeting their deductible, according to the analysis. Avalere also points out that while most plans in 2016 cover primary care visits without requiring consumers to fulfill their deductible, specialist visits and prescription drugs typically do apply to the deductible.
As with many proposals for the ACA, this one comes with a few potential negatives. The study points out that standard benefits limit flexibility for plans and could increase costs. Payers such as Cigna have advocated for the marketplaces offering more flexibility for insurers.
However, California has already standardized the benefits plans must offer on its state exchange, Covered California, as have Connecticut, Massachusetts, New York, Oregon, Vermont and the District of Columbia, FierceHealthPayer has reported.
"Introducing standardized benefit designs into the federal exchange builds on the existing approach of many states," Elizabeth Carpenter, vice president at Avalere, said in the analysis. "While standard benefits limit flexibility for plans and could increase costs, the structure may appeal to some consumers by making it easier to compare plans and choose insurance."
To learn more:
- here is the Avalere study
State reveals benefit designs for exchange participation
Only 2% of insurers cover mandated essential health benefits
Cigna CEO: ACA marketplace needs to offer flexibility to insurers
Design influences bundled payment success